Whether you have a small farm or ranch or have expanded into broader commercial operations such as processing, side work for neighboring farms or ranches, or selling product on your property, farm and ranch insurance can protect your home, your buildings, and your livestock and equipment. It will also provide financial help if you are brought into a liability claim where you must compensate someone for harm done to them on your property or resulting from your operations or products. Here are the most essential coverages for your farm or ranch.
Property Insurance for Farms & Ranches
Operating a farm or ranch typically entails living at your workplace, so having insurance that covers both home and business property is convenient. A farm and ranch insurance policy is designed to provide help if your home, farm or ranch structures, equipment, raw material inputs or livestock are harmed by weather, fire, explosion, vandalism, theft, or accidents.
Basic Farm & Ranch Policies are Often Quite Broad, Including:
- Damage to your equipment,
- Rental costs for equipment while yours is being repaired or replaced after a covered incident,
- Designated harm to livestock and harvested products, and
- Damage to your home and its contents.
What isn’t insured can frequently be added by endorsement to your policy or through purchase of separate coverage. You can often enhance your farm and ranch insurance to include sewer and drain backup as well as business interruption coverage, which provides a flow of income if a covered event shuts down your operations.
If you have built-in or mobile equipment that isn’t covered for breakdown under the basic property policy, you can usually add it as an equipment breakdown insurance policy or endorsement. This goes beyond fire or other events listed in your property policy and covers mechanical breakdown or system failure and the related consequences. That could include refrigerators, incubators, irrigation systems, and mobile harvesting or processing equipment, among other items. Talk to your insurance agent or broker about your operations and equipment to get a full view of coverage options. Policies typically provide repair or replacement of the equipment plus business income coverage if a breakdown interrupts your operations for a substantial period of time. It can also be written to provide for the costs of renting equipment while yours is being repaired.
Farmers and ranchers are increasingly dependent on computers for their financial accounting and feed, chemical, and planting operations, so make sure your computers are covered in your equipment breakdown and other property insurance.
For flood insurance, you will need a separate policy that your agent or broker can help you place. And, depending on where you live, you may have special wildfire, hail, or windstorm deductibles or limits of coverage. These can cause you greater out-of-pocket expenses, so be clear on what you might owe if you have a claim.
Crops in the ground probably need to be insured under a crop insurance policy, which is completely separate from your farm and ranch policy. Your insurance agent or broker will be able to guide you on your options.
Equine insurance may also be right for you, depending on your ownership and use of horses. It usually is available to cover the expensive treatment for colic and other illnesses, surgery after an accident, euthanasia, theft, and mortality. If your horse is used for business purposes, talk about loss of use coverage with your agent.
Drones, unmanned aerial vehicles and all-terrain vehicles pose their own risks of financial loss. They may have some coverage under the property damage side of your farm and ranch policy, but different insurers have different restrictions. Go over this aspect of coverage carefully to ensure you have enough appropriate protection. Separate policies are available that might provide the more comprehensive coverage you may need.
If you operate any kind of retail store or agritourism business on your farm or ranch, including pony rides, horse riding lessons, crop picking, or a corn maze, you may need separate commercial insurance. A farm and ranch policy might not be sufficient to cover those side businesses for property or liability.
Liability Insurance for Farms & Ranches
Speaking of liability, your farm or ranch has numerous liability risks. Those include personal liability for members of your household as well as commercial general liability, product liability and pollution liability for your farming or ranching operations.
Personal Liability Insurance for Farmers & Ranchers
This liability insurance, which is usually embedded in a farm and ranch policy, covers injuries to visitors in your home as well as harm you or members of your household may cause to others or their property when away from your premises. This includes things like a guest’s fall down your staircase due to a trip hazard or your child’s breakage of a sliding glass door at a friend’s house. It doesn’t cover ATV use off your property or automobile accidents, which require coverage specific to those risks.
Commercial General Liability Insurance for Farms & Ranches
Most farm and ranch policies include general liability insurance, which helps pay for medical treatment and legal bills associated with injuries to visitors to your commercial property. Things like falls, cuts from machinery and burns from hot equipment are typical claims. It can also cover repairs if a piece of equipment you own or use bangs into a visitor’s vehicle or something similar.
Product Liability Insurance for Farms & Ranches
Products you sell or otherwise distribute could have an unknown defect that causes illness or injury. Product liability insurance helps with legal bills and medical expenses for such instances. Since a product defect can injure or sicken many people or cause severe harm, anyone selling or distributing consumables should consider this important coverage.
Product Recall Insurance for Farms & Ranches
Closely related but separate insurance for product recall should also be discussed with your agent or broker, since you may be responsible for notifying customers and distributors that a product you grew or processed might need to be pulled from shelves, returned or destroyed. Product recall insurance won’t pay for injuries caused by your product, but it will help with costs associated with notifications, refunds, removal, and destruction of a product.
Pollution & Environmental Insurance for Farms & Ranches
From chemicals you spread to animal waste to fuel tanks, your farm or ranch has ongoing risks associated with spills, leaks, and releases that could pollute the environment. A pollution liability policy may be needed to cover such risks, whether from underground or other storage tanks or from active operations, if protections aren’t available under the liability section of your farm and ranch policy. This insurance will usually help with cleanup costs, legal defense fees if you are sued, and sometimes investigation expenses and restoration. You may even be offered media relations services, which can be very helpful to keep your reputation intact.
If you spray herbicides or pesticides and damage neighboring crops or operations, such as beekeeping or fly predator breeding, you may find your pollution and environmental insurance falls short. Read your policy carefully to see if you need to include farm chemical application liability.
Other Liability Insurance for Farms & Ranches
There are numerous other liability risks you might face depending on the way you use your property. If you board horses, dogs or other animals, you may have bailee liability, or if you perform services for other farms, such as planting, harvesting, or processing, your basic farm and ranch policy might have gaps. It is very important to discuss all of your operations with your insurance agent or broker to discover liability exposures that might not be insured.
Cyber Insurance for Farms & Ranches
Many farmers and ranchers use the internet for their business, whether it’s scheduling planting, feeding and harvesting, handling the financial books, or doing mandatory product tracing. Having an integrated computer network certainly aids efficiency, but it also increases your vulnerability to cyberattacks. Cyber insurance can help in two ways with these risks: First-party cyber insurance can help unlock your ransomed data, protect it from distribution on the dark web, and restore your systems, while third-party cyber insurance can help you pay for expenses associated with release of vendor, customer or employee data or infiltration of their systems traceable to errors by you or your employee. You may even be able to find help with business interruption due to hacker interference with your operational systems.
Auto Insurance for Farms & Ranches
Any vehicle meant to be driven on public roads needs to be insured for liability. Each state has its own laws about the type of liability insurance required and the minimum amount of coverage you must carry. Auto liability insurance covers you for injuries to others outside your household for which you are responsible as well as damage to their property. You can enhance your liability protection with medical payments coverage, which insures care for passengers in your vehicle after an accident, no matter who caused the crash.
The property side of a farm and ranch auto policy is divided into collision insurance, which covers damage to your vehicle if you collide with another auto or stationary object, and comprehensive insurance, which is an optional protection for non-collision damage to your vehicle, such as animal or hail dents or windshield breakage. Your mobile equipment, such as tractors and utility vehicles, are not meant for use on public roads and need their own, separate insurance under a mobile equipment policy.
Workers Compensation Insurance for Farms & Ranches
Depending on the size of your farm or ranch, you may employ helpers during certain seasons or for the whole year. If so, you probably need workers compensation insurance. Amounts of coverage and benefits are governed by your state, but coverage generally includes payments for medical treatment due to injury or illness resulting from work duties as well as rehab expenses and lost wages.
One area that often gets overlooked is whether family farm members need to be covered under a workers compensation policy. The answer involves such factors as whether they receive compensation and what your state’s specific rules are for family members. Whether you are required to cover them or not, keep in mind that personal health insurance policies often contain specific exclusions for work-related injuries.
Get Advice from a Farm & Ranch Insurance Agent or Broker
Whether you run a small family farm or ranch or you have expanded into processing, sales or services, you need financial protection for your home and business. Farm and ranch insurance is a great way to make sure you can recover from property damage or liability expenses. Locate an insurance agent who can help you find insurance for your ranch and farm near you that meets your needs.